Patent intelligence: Mastering disruptive innovation through patent intelligence

With the emergence of disruptive technologies such as drones, self-driving cars, and gene-editing, now is the time to realise that patent intelligence is critical in determining winners and losers in business competition, say Andrea Walsh and Cris Flagg of Express Search.

With the increasing speed of innovation, shortened product life cycles, and the globalisation of markets, companies of all sizes must proactively monitor the competitive landscape to gain an edge over their rivals. Within the past 25 years, technology has advanced at breakneck speed to introduce innovations such as smartphones, drones, digital books, gene-editing through CRISPR (clustered regularly interspaced short palindromic repeats), targeted cancer immunotherapeutic biologic drugs, self-driving cars, and the internet of things. This disruptive innovative and technical growth is not expected to slow in the coming decades.

"Properly executed analysis of patent, technical and business intelligence enables businesses to leapfrog competitors."

Such disruptions have corresponded with an unprecedented number of worldwide patent filings. In 2017, the World Intellectual Property Organization announced it had handled around 3.2 million worldwide patent applications. The US Patent and Trademark Office issued approximately 318,849 utility patents in 2017, an increase of about 5.2% over 2016, and published 380,450 utility and plant patent applications, slightly fewer than in 2016.

This influx of filings continues to generate valuable, yet largely untapped sets of patent data. Relevant information from this untapped data must be identified, analysed and presented in a form that provides meaningful insights from the patents for better decision-making and strategy development. The transformation of this data is accomplished through novel and ever-changing tools termed “patent analytics”.

The large number of data points from multiple patent resources are fed into dedicated analytics software and further analysed and mined. Data mining is an evolving process of discovering patterns in large datasets as described above, involving the intersection of machine learning, artificial learning, statistics, and database systems.

"Clients should budget separately for acquiring and analysing patent data to emphasise its role in cost reductions and meaningful insights throughout the business."

The output is reported by various visualisation and mapping techniques and transformed into technical, business and legal insights to support corporate decisions. This transformation is defined as “patent intelligence”. The goal of this article is to unlock the hidden value of patent intelligence as a key factor in gaining a competitive advantage in technologically competitive business environments.

Table 1 highlights the different approaches, audiences, and uses of patent intelligence from “traditional” types of patent searches.

The table demonstrates the effect of patent intelligence as an emerging business driver, since startup or technology transfer firms seeking capital discover that their chances of being funded are much greater if technical and competitive intelligence is supported by insightful patent intelligence. It is important to understand the crucial distinctions between patent searching, patent analytics, and patent intelligence since the high level of expertise required to perform each step affects the overall quality of
the dynamic patent intelligence reports generated for each process.

Patent intelligence is the key in determining winners and losers in business competition. For many organisations, technological assets and proprietary knowledge are focal points of the whole company. Consequently, the leaders of innovation-driven companies need constantly to assess internal and external R&D initiatives and incorporate these findings into their company’s strategic planning processes.

Detailed innovation assessments, technical and new product platforms, patent filings in categorised classification codes, and determining the legal status of pending and granted patents generate new insights about market trends and competitor activity. Properly executed analysis of patent, technical and business intelligence enables businesses to leapfrog competitors and be foundational leaders in disruption innovations and solutions to address changing market demands.

The advantages of innovation

Companies such as Apple, IBM, and Google are leaders in innovation because they understand how to differentiate themselves from competitors and address changing market demands. This type of business intelligence enables entrepreneurs and companies to leapfrog competitors and be foundational leaders in technology domains that have yet to materialise. How do these and other innovation-driven companies achieve this?

This is achieved exactly when patent analytic tools and patent intelligence intersect and are expertly applied and practised. By elevating the role of patent intelligence and analytics, resourceful companies are seizing the wealth of information sewn into every patent to become more informed and, subsequently, to formulate better business strategies.

Experts corroborate the effectiveness of patent intelligence integrated into a company’s strategic technology and business plan. Firms that use patent intelligence obtained from the latest patent analytics software extract higher strategic and financial value from their patent portfolios.

IBM strategists identified unexplored technology domains using published patent data and directed R&D efforts to leapfrog competitors and become first adopters in previously uncontested technology areas. Some examples include IBM’s breakthroughs in silicon-germanium chips, artificial intelligence, and quantum computing.

With proper patent portfolio benchmarking, patent landscape studies, and patent intelligence gathering, IBM, without fear of litigation, effectively blocked competitors from entering technology domains. IBM was also able to open new licensing opportunities and reinforce its title as the top patenting company in the world. The company also offers its very own patent analytics platform.

Patent intelligence is a strategic tool that provides awareness on profitability and market value of protecting an innovation. The first step for business leaders to use patent data as a resource is to adopt processes using experienced professional searchers and/or analysts who have known technical expertise to gather and analyse “patent intelligence” and write a multi-tiered executive and technical report targeted toward the needs of specific audience members.

The cost of patent intelligence must no longer be the responsibility of patent attorneys who focus only on obtaining a granted patent without fully grasping how the client will use it to profit. Clients should budget separately for acquiring and analysing patent data to emphasise its role in cost reductions and meaningful insights throughout the business.

After these data points are extracted, analysed, and woven into an analytical framework, the insights that emerge can answer key business questions and provide a clear story of competitors’ R&D activity, marketing efforts, IP strategy, and even human capital. Patent intelligence also streamlines the process of identifying emerging markets, technological gaps, and licensing opportunities. With this intelligence, firms are capable of benchmarking themselves to measure their position in the market relative to their competitors.

Table 1 identifies the types of specific strategic information experts can extract.

It is well recognised in today’s economic environment, that intangible assets such as patent rights are key factors for creating and sustaining firm competitive advantage. The growing relevance of IP rights, and patents in particular, has moved their management from a mere legal burden to a strategic matter. Firms are increasingly challenged to effectively manage their own patent intelligence, but not all organisations are willing to adapt old-school practices and embrace the patent revolution.

Patent intelligence is invisible to managers, and rarely is it the topic of C-suite or board-level analysis and planning. Simply looking at a patent’s intrinsic qualities does not tell you its value—either its market value as a financial asset, its commercial value in fortifying your products’ market share and margins, or its strategic value in ensuring your company’s future competitive success.

Evolving patent intelligence no longer ignores the extrinsic factors that ultimately determine not only what a patent is worth—these include comparisons for similar patents that have been licensed, sold, or have won judgments after litigation—but also what are the most profitable ways to deploy that patent to generate an appropriate return on investment on the innovation embodied in the patent.

Companies are operating in a high-risk, unwelcoming, and volatile business landscape. With the ongoing technological shifts, consumer demand for more innovative products, and increased competition in the marketplace, it is more important than ever for companies to leverage patent intelligence to formulate R&D goals for the future.

Business leaders are slowly realising the value of patent analysis in support of corporate decision-making. Now is the time for businesses to realise the urgent need to make the changes described in this article or risk being becoming irrelevant in current and future markets.

Andrea Walsh is a senior research consultant at Express Search. She has expertise in dynamic patent research and analysis in multiple chemical and biotechnology areas. Walsh provides innovative research solutions in molecular/cell biology, immunology, gene-editing and biosequence analysis. She can be contacted at: projects@expresssearch.com

Cris Flagg is president of Express Search. He has a master’s degree in computer science, focusing on machine learning/artificial intelligence. With 25 years’ experience in patent research, Flagg has developed landscaping analytics and software research tools that his company uses to provide research. He can be contacted at: projects@expresssearch.com